#It’s Official: Skydance Wins the Battle for Paramount Global

In a landmark deal that will shake up the entertainment landscape, Shari Redstone has agreed to sell control of Paramount Global to a consortium led by Skydance, the production company led by David Ellison, and Gerry Cardinale’s RedBird Capital.

The sale, assuming it is approved by regulators and completed (and assuming a better bid does not emerge), would see Skydance acquire Redstone’s majority stake in National Amusements, which in turn would secure control of Paramount, the owner of the Paramount film and TV studios, Paramount+, CBS, and cable channels like Nickelodeon, MTV, and Comedy Central.

The consummation of the deal is the culmination of months of “will they or won’t they” speculation, with the Skydance consortium beginning talks late last year, only to see multiple rounds of negotiations fall apart when Redstone rejected the deal in place at the 11th hour last month.

The two sides, however, continued talking, leading to a new deal that secured Redstone’s approval.

Once the deal closes, the plan is for Paramount to acquire Skydance, which in turn will install its own leadership team at the stories entertainment company. Ellison will be CEO, with former NBCUniversal CEO Jeff Shell (currently working at RedBird) set to run the company day-to-day as its president.

Skydance had to sweeten its deal offer in hopes of ensuring more value for non-voting Paramount shareholders who had complained that initial deal offers had guaranteed Redstone a premium but would have diluted them, giving them the short end of the stick.

According to the companies, the SKydance consortium will “invest $2.4 billion to acquire National Amusements for cash and $4.5 billion for the stock/cash merger consideration to be paid for publicly traded Class A shares and Class B shares, as well as $1.5 billion of primary capital to be added to Paramount’s balance sheet”

The deal not only buys out Redstone’s stake, but also allows pother Class A and Class B shareholders to cash out as well at $23 per share and $15 per share, respectively. Skydance says when it is all said and done, it expects to own 70% of shares outstanding.

The all-stock deal to merge Skydance into Paramount will value Ellison’s studio ay $4.75 billion.

National Amusements is a regional movie theater chain, however, Sumner Redstone turned it into a media behemoth by acquiring Viacom, Paramount and CBS. National Amusements only owns about 10 percent of Paramount’s equity, but it controls about 80 percent of its voting stock, giving it control of the entertainment firm.

Shari Redstone has run the company since her father’s death in 2020.

“In 1987, my father, Sumner Redstone, acquired Viacom and began assembling and growing the businesses today known as Paramount Global,” Redstone said in a statement Sunday night. “He had a vision that ‘content was king’ and was always committed to delivering great content for all audiences around the world. That vision has remained at the core of Paramount’s success and our accomplishments are a direct result of the incredibly talented, creative, and dedicated individuals who work at the company.

“Given the changes in the industry, we want to fortify Paramount for the future while ensuring that content remains king,” she continued. “Our hope is that the Skydance transaction will enable Paramount’s continued success in this rapidly changing environment. As a longtime production partner to Paramount, Skydance knows Paramount well and has a clear strategic vision and the resources to take it to its next stage of growth. We believe in Paramount and we always will.”

“This is a defining and transformative time for our industry and the storytellers, content creators and financial stakeholders who are invested in the Paramount legacy and the longevity of the entertainment economy,” Ellison added. “I am incredibly grateful to Shari Redstone and her family who have agreed to entrust us with the opportunity to lead Paramount. We are committed to energizing the business and bolstering Paramount with contemporary technology, new leadership and a creative discipline that aims to enrich generations to come.”

“The recapitalization of Paramount and combination with Skydance under David Ellison’s leadership will be an important moment in the entertainment industry at a time when incumbent media companies are increasingly challenged by technological disintermediation,” added Cardinale. “As one of the iconic media brands and libraries in Hollywood, Paramount has the intellectual property foundation to ensure longevity through this evolution – but it will require a new generation of visionary leadership together with experienced operational management to navigate this next phase. RedBird is making a substantial financial investment in partnership with the Ellison family because we believe that the pro forma company under this leadership team will be the pace car for how these incumbent legacy media businesses will need to be run in the future.”

By acquiring a majority of National Amusements, Skydance will be able to control Paramount, including the prestigious studios (and all their associated intellectual property), the broadcast network, streaming service, and cable channels.

Paramount’s future has been the focus of intense speculation in recent months, with its streaming business still hemorrhaging cash, its linear TV business in continued decline, and with its credit rating on the ropes.

In addition to Skydance, Apollo and Sony have kicked the tires of the company, which ousted its CEO Bob Bakish in April, replacing him with a trio of executives in the “office of the CEO.”

National Amusements, too, has faced challenges. The company took a $125 million strategic investment in May from BDT & MSD Partners, with the proceeds paying down debt and paying back loans.

S&P Global downgraded Paramount’s debt to BB+ in March, which is considered “junk” status. “We downgraded Paramount due to the degradation of credit metrics from the accelerating declines in linear media and the shift toward a more competitive and less certain streaming model,” S&P’s Naveen Sarma wrote.

He added in a note after Bakish departed that the “shared management structure is not sustainable for Paramount Global, or for any publicly traded company, outside of a short transitional period.”

However, the co-CEOs –Brian Robbins, George Cheeks and Chris McCarthy — had released their own plan for the company, and told staff last month that they were already executing on it.

“The Special Committee would like to thank our Co-CEOs George Cheeks, Chris McCarthy and Brian Robbins for making significant progress on optimizing company operations in a short period of time, positioning Paramount for a sustainable transformation and a path to profitable growth going forward,” said Paramount board member and special committee chair Charles Phillips.

With Skydance set to take control and install new leadership and a new strategy at Paramount, all of Hollywood and Wall Street will be watching.